Australian Stock Market Report – Midday 6/24/13

MID-SESSION REPORT

(12.30pm AEST)

Local shares are down 1.4 per cent at lunch, exceeding all of last week's losses in just two hours of trade. The defensive healthcare sector is bucking the trend, while all other industries are slumping significantly.

Last week was all about the Fed's confirmation that the end of asset purchases is likely over the next year. This pushed markets and currencies around the world lower. Over the previous five days, the All Ords (XAO) fell 1.08 per cent, the Dow fell 1.8 per cent while the major euro zone markets of Germany and France lost close to 4 per cent. Shares in Japan, Hong Kong and China fell by 3.3-4.3 per cent.

Commodity prices have been hard hit due to the Fed's statement, concerns of a Chinese credit crunch and disappointing economic news from our largest trading partner. BHP Billiton (BHP) is down 3 per cent and Rio Tinto (RIO) is 1.7 per cent weaker.

Australia's biggest gold miner, Newcrest Mining (NCM) is down 5.6 per cent and is trading at a nine-year low. NCM shares have fallen 55 per cent this calendar year. Iron ore miner Fortescue Metals (FMG) is trading below $3.00 per share for the first time since September 2012. The iron ore price is down 25 per cent since hitting highs in February.

It isn't all bad news today however, with Metcash (MTS), the owner of IGA supermarkets and Mitre 10 up 6.9 per cent. MTS announced a $280 million full year underlying profit and a 16.5cps final dividend (matches last year's final dividend). Its sell-off of Franklins is almost complete. Revenue rose 3.8 per cent and profit has jumped by 6.9 per cent following its restructure.

This will be a very quiet week in Australia on the data front, with no market moving releases out to play havoc with the emotions of local investors. The attention will lie firmly on offshore events. Japan will have a big day of economic news on Friday. German business confidence tonight will be one of the key releases in Europe together with the European Union Economic Summit on Thursday and Friday. In the US, Tuesday night will be busy, with consumer confidence and durable goods orders issued.

At lunch, 842 million shares have changed hands, worth just $1.83 billion. 201 stocks are higher, 633 are in the red and 316 are unchanged.

[Kick off your trading day with our newsletter]